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NV5 Announces Record Fourth Quarter and Full Year 2020 Results; Exceeds Analysts' Expectations

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NV5 Global, Inc.
·11 min read
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HOLLYWOOD, Fla., March 02, 2021 (GLOBE NEWSWIRE) -- NV5 Global, Inc. (Nasdaq: NVEE) (“NV5” or the “Company”), a provider of compliance, technology, and engineering consulting solutions, today reported financial results for the fourth quarter and full year ended January 2, 2021.

“NV5 delivered another strong performance in 2020 with significant growth in revenues, EBITDA, margin, and cash flows from operations in spite of the coronavirus pandemic. The integration of our acquisitions delivered margin improvement through efficiencies of scale and our shared services model, and strong cash flows allowed accelerated payments of our debt revolver. We enter 2021 with strong momentum and expect to see benefits from a market focus on reliable delivery of power and environmental sustainability, a healthy acquisition pipeline, and the reopening of the economy throughout 2021,” said Dickerson Wright, PE, Chairman and CEO of NV5.

Fourth Quarter 2020 Financial Highlights

  • Gross Revenues grew by 22% in the fourth quarter of 2020 to $161.2 million compared to $132.6 million in the fourth quarter of 2019.

  • Net income grew by 28% in the fourth quarter of 2020 to $4.6 million compared to $3.6 million in the fourth quarter of 2019, with the fourth quarter of 2020 including $2.2 million of additional interest expense and $3.0 million of additional intangible amortization expense compared to fourth quarter of 2019.

  • Adjusted EBITDA, which excludes stock-based compensation and acquisition-related costs, grew by 37% in the fourth quarter of 2020 to $24.4 million compared to $17.9 million in the fourth quarter of 2019.

  • GAAP EPS was $0.35 per share in the fourth quarter of 2020.

  • Adjusted EPS in the fourth quarter of 2020 was $0.82 per share compared to $0.64 per share in the fourth quarter of 2019, a 28% increase.

  • Cash flows from operating activities for the fourth quarter of 2020 grew to $23.6 million compared to $18.3 million in the fourth quarter of 2019, a 29% increase.

Full Year 2020 Financial Highlights

  • Gross Revenues grew by 30% in 2020 to $659.3 million compared to $508.9 million in 2019.

  • Net income in 2020 was $21.0 million compared to $23.8 million in 2019, with 2020 including $12.9 million of additional interest expense, $14.1 million of additional intangible amortization expense, and a higher effective income tax rate compared to 2019.

  • Adjusted EBITDA, which excludes stock-based compensation and acquisition-related costs, grew by 52% in 2020 to $105.4 million compared to $69.3 million in 2019.

  • GAAP EPS was $1.65 per share in 2020.

  • Adjusted EPS in 2020 was $3.72 per share compared to $3.25 per share in 2019, a 14% increase.

  • Cash flows from operating activities in 2020 were $96.0 million compared to $39.9 million in 2019, a 141% increase.

52/53 Week Fiscal Year

NV5 uses a 52/53 week fiscal year ending on the Saturday closest to the calendar quarter end. As a result, 2020 included 53 weeks compared to 2019, which included 52 weeks.

Use of Non-GAAP Financial Measures; Comparability of Certain Measures

Earnings before interest, taxes, depreciation, and amortization (“EBITDA”) is not a measure of financial performance under GAAP. Adjusted EBITDA reflects adjustments to EBITDA to eliminate stock-based compensation expense and acquisition-related costs. Management believes Adjusted EBITDA, in addition to operating profit, Net Income, and other GAAP measures, is a useful indicator of our financial and operating performance and our ability to generate cash flows from operations that are available for taxes, capital expenditures, and debt service. A reconciliation of Net Income, as reported in accordance with GAAP, to Adjusted EBITDA is provided at the end of this news release.

Adjusted earnings per diluted share (“Adjusted EPS”) is not a measure of financial performance under GAAP. Adjusted EPS reflects adjustments to reported diluted earnings per share (“GAAP EPS”) to eliminate amortization expense of intangible assets from acquisitions, net of tax benefits, and acquisition-related costs. As we continue our acquisition strategy, the growth in Adjusted EPS will likely increase at a greater rate than GAAP EPS. A reconciliation of GAAP EPS to Adjusted EPS is provided at the end of this news release.

Our definition of Adjusted EBITDA and Adjusted EPS may differ from other companies reporting similarly named measures. These measures should be considered in addition to, and not as a substitute for, or superior to, other measures of financial performance prepared in accordance with GAAP, such as Net Income, and Diluted Earnings per Share.

Conference Call

NV5 will host a conference call to discuss its fourth quarter and full year 2020 financial results at 4:30 p.m. (Eastern Time) on March 2, 2021. The accompanying presentation for the call is available by visiting http://ir.nv5.com.

Date:

Tuesday, March 2, 2021

Time:

4:30 p.m. Eastern

Toll-free dial-in number:

+1 833-900-1538

International dial-in number:

+1 236-712-2278

Conference ID:

4096283

Webcast:

http://ir.nv5.com

Please dial-in at least 5-10 minutes prior to the start time to allow the operator to log your name and connect you to the conference.

The conference call will be webcast live and available for replay via the “Investors” section of the NV5 website.

About NV5

NV5 Global, Inc. (NASDAQ: NVEE) is a provider of compliance, technology, and engineering consulting solutions for public and private sector clients supporting infrastructure, utility, and building assets and systems. The Company primarily focuses on six business verticals: testing, inspection & consulting, infrastructure support services, utility services, buildings & program management, environmental health sciences, and geospatial technology services. NV5 operates out of more than 106 offices nationwide and abroad. For additional information, please visit the Company’s website at www.NV5.com. Also visit the Company on Twitter, LinkedIn, Facebook, and Vimeo.

Forward-Looking Statements

This news release contains “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. The Company cautions that these statements are qualified by important factors that could cause actual results to differ materially from those reflected by the forward-looking statements contained in this news release and on the conference call. Such factors include: (a) changes in demand from the local and state government and private clients that we serve; (b) general economic conditions, nationally and globally, and their effect on the market for our services; (c) competitive pressures and trends in our industry and our ability to successfully compete with our competitors; (d) changes in laws, regulations, or policies; and (e) the “Risk Factors” set forth in the Company’s most recent SEC filings. All forward-looking statements are based on information available to the Company on the date hereof, and the Company assumes no obligation to update such statements, except as required by law.

Investor Relations Contact

NV5 Global, Inc.
Jack Cochran
Vice President, Marketing & Investor Relations
Tel: +1-954-637-8048
Email: ir@nv5.com

Source: NV5 Global, Inc.



NV5 GLOBAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(in thousands, except share data)

January 2, 2021

December 28, 2019

Assets

Current assets:

Cash and cash equivalents

$

64,909

$

31,825

Billed receivables, net

142,705

131,041

Unbilled receivables, net

74,458

79,428

Prepaid expenses and other current assets

6,804

8,906

Total current assets

288,876

251,200

Property and equipment, net

27,011

25,733

Right-of-use lease assets, net

43,607

46,313

Intangible assets, net

174,931

255,961

Goodwill

343,796

309,216

Other assets

2,954

4,714

Total Assets

$

881,175

$

893,137

Liabilities and Stockholders’ Equity

Current liabilities:

Accounts payable

$

39,989

$

36,116

Accrued liabilities

45,325

47,432

Billings in excess of costs and estimated earnings on uncompleted contracts

24,962

3,303

Client deposits

380

221

Current portion of contingent consideration

1,334

1,954

Current portion of notes payable and other obligations

24,196

25,332

Total current liabilities

136,186

114,358

Contingent consideration, less current portion

1,066

2,048

Other long-term liabilities

38,737

34,573

Notes payable and other obligations, less current portion

283,326

332,854

Deferred income tax liabilities, net

27,791

53,341

Total liabilities

487,106

537,174

Commitments and contingencies

Stockholders’ equity:

Preferred stock, $0.01 par value; 5,000,000 shares authorized, no shares issued and outstanding

Common stock, $0.01 par value; 45,000,000 shares authorized, 13,270,131 and 12,852,357 shares issued and outstanding as of January 2, 2021 and

December 28, 2019, respectively

133

129

Additional paid-in capital

268,271

251,187

Retained earnings

125,665

104,647

Total stockholders’ equity

394,069

355,963

Total liabilities and stockholders’ equity

$

881,175

$

893,137



NV5 GLOBAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF NET INCOME AND COMPREHENSIVE INCOME
(UNAUDITED)
(in thousands, except share data)

Three Months Ended

Twelve Months Ended

January 2, 2021

December 28, 2019

January 2, 2021

December 28, 2019

Gross revenues

$

161,178

$

132,598

$

659,296

$

508,938

Direct costs:

Salaries and wages

39,936

39,261

176,865

153,023

Sub-consultant services

28,929

22,629

107,602

79,598

Other direct costs

12,519

5,690

40,291

30,935

Total direct costs

81,384

67,581

324,758

263,556

Gross Profit

79,794

65,017

334,538

245,382

Operating Expenses:

Salaries and wages, payroll taxes and benefits

43,360

35,126

176,816

128,558

General and administrative

12,019

11,871

50,214

42,656

Facilities and facilities related

5,155

4,737

21,280

17,145

Depreciation and amortization

9,691

6,908

42,079

25,816

Total operating expenses

70,225

58,643

290,389

214,175

Income from operations

9,569

6,374

44,149

31,207

Interest expense

(3,260

)

(1,045

)

(15,181

)

(2,275

)

Income before income tax expense

6,309

5,329

28,968

28,932

Income tax expense

(1,735

)

(1,754

)

(7,950

)

(5,176

)

Net Income and Comprehensive Income

$

4,574

$

3,575

$

21,018

$

23,756

Earnings per share:

Basic

$

0.37

$

0.29

$

1.70

$

1.96

Diluted

$

0.35

$

0.28

$

1.65

$

1.90

Weighted average common shares outstanding:

Basic

12,468,444

12,204,650

12,362,786

12,116,185

Diluted

12,922,121

12,589,800

12,713,075

12,513,034



NV5 GLOBAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in thousands)

Twelve Months Ended

January 2, 2021

December 28, 2019

Cash flows from operating activities:

Net income

$

21,018

$

23,756

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

45,488

25,816

Non-cash lease expense

9,469

9,410

Provision for doubtful accounts

4,311

1,239

Stock-based compensation

14,955

10,430

Change in fair value of contingent consideration

(216

)

(Gain) loss on disposals of property and equipment

(462

)

21

Deferred income taxes

(13,064

)

(6,634

)

Amortization of debt issuance costs

896

131

Changes in operating assets and liabilities, net of impact of acquisitions:

Billed receivables

(13,592

)

5,140

Unbilled receivables

1,996

(11,807

)

Prepaid expenses and other assets

4,680

(3,599

)

Accounts payable

3,367

534

Accrued liabilities

(4,865

)

(7,315

)

Income taxes payable

(2,697

)

Billings in excess of costs and estimated earnings on uncompleted contracts

21,659

(4,322

)

Deposits

153

13

Net cash provided by operating activities

96,009

39,900

Cash flows from investing activities:

Cash paid for acquisitions (net of cash received from acquisitions)

(882

)

(348,375

)

Proceeds from sale of assets

1,670

Purchase of property and equipment

(9,855

)

(2,625

)

Net cash used in investing activities

(9,067

)

(351,000

)

Cash flows from financing activities:

Borrowings from Senior Credit Facility

330,457

Payments of borrowings from Senior Credit Facility

(36,625

)

(10,000

)

Payments on notes payable

(15,207

)

(13,393

)

Payments of contingent consideration

(1,579

)

(1,202

)

Payments of debt issuance costs

(447

)

(3,676

)

Net cash (used in) provided by financing activities

(53,858

)

302,186

Net increase (decrease) in cash and cash equivalents

33,084

(8,914

)

Cash and cash equivalents – beginning of period

31,825

40,739

Cash and cash equivalents – end of period

$

64,909

$

31,825



NV5 GLOBAL, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP FINANCIAL MEASURES
TO COMPARABLE NON-GAAP FINANCIAL MEASURES
(UNAUDITED)
(in thousands, except share data)


RECONCILIATION OF GAAP NET INCOME TO ADJUSTED EBITDA

Three Months Ended

Twelve Months Ended

January 2, 2021

December 28, 2019

January 2, 2021

December 28, 2019

Net Income

$

4,574

$

3,575

$

21,018

$

23,756

Add:

Interest expense

3,260

1,045

15,181

2,275

Income tax expense

1,735

1,754

7,950

5,176

Deprecation and amortization

10,808

6,908

45,488

25,816

Stock-based compensation

4,055

3,441

14,955

10,430

Acquisition-related costs

11

1,148

856

1,819

Adjusted EBITDA

$

24,443

$

17,871

$

105,448

$

69,272


RECONCILIATION OF GAAP EPS TO ADJUSTED EPS

Three Months Ended

Twelve Months Ended

January 2, 2021

December 28, 2019

January 2, 2021

December 28, 2019

Net Income - per diluted share

$

0.35

$

0.28

$

1.65

$

1.90

Per diluted share adjustments:

Add:

Amortization expense of intangible assets and acquisition-related costs

0.63

0.50

2.79

1.79

Income tax expense

(0.16

)

(0.14

)

(0.72

)

(0.44

)

Adjusted EPS

$

0.82

$

0.64

$

3.72

$

3.25